PNB, RCBC up for Moody's review for possible downgrade

Global debt-watcher Moody's Investors Service is reviewing ratings of two Philippine banks for possible downgrade  due to a change in its methodology.

The affected banks are Philippine National Bank (PNB) and Rizal Commercial Banking Corp. (RCBC).

Moody's, however, clarified the review has nothing to do with the banks' credit quality.

“The reviews of the banks' sub-debt ratings are not in any way related to any deterioration in the affected banks' fundamental credit quality,” it said in a statement.

The new methodology was in line with changing policies in dealing with ailing banks globally.

“Government policy has evolved towards the adoption of 'burden sharing' principles, and gradually away from the automatic bail out of all creditors over the last few years,” Moody's  noted.

The review will be completed within the next three months.

Moody's said sub-debt ratings under review are  PNB's long-term local currency subordinated debt rating of Ba3 or three notches below investment grade as well as its long-term local currency "backed" subordinated debt rating of B1 or four notches below investment grade.

For RCBC, its long-term global foreign currency subordinated debt program rating of Ba3 is under review. — Siegfrid O. Alegado/BM, GMA News